By Gopika Gopakumar
MUMBAI, April 23 (Reuters) – India’s inflation risks have increased, driven by supply-side disruptions including the Iran war and weather-related uncertainties, the central bank said in its monthly economic report released on Thursday.
Here are the details:
• If the West Asia conflict persists and supply chains are not restored early, that may create challenges to the domestic economy
• Strong macro fundamentals should help the economy withstand shocks
• Inflation may have been contained within the tolerance band, but upside risks have increased, driven by supply-side disruptions including weather-related uncertainties
• Possible second-round effects with the supply shock transforming itself into demand shock warrantcareful and continuous assessment
• India’s foreign exchange reserves remain comfortable, providing cover for goods imports of around 11 months
(Reporting by Gopika Gopakumar; Editing by Mrigank Dhaniwala)
